Attached files
Exhibit 10.1
EMPLOYMENT
SEPARATION AND SEVERANCE AGREEMENT
This
Employment Separation and Severance Agreement (the “Separation Agreement”) is
made effective as of January 19, 2010, by and between Golden Phoenix Minerals,
Inc., a Nevada corporation (the "Company") and David A. Caldwell, an individual
(the "Employee").
RECITALS
WHEREAS, pursuant to a written
employment agreement between the Company and Employee dated February 27, 2006,
as amended by that certain Addendum to Employment Agreement dated January 31,
2007, the Company has employed the Employee as its Chief Executive Officer
(“CEO”) effective as of January 31, 2007 (collectively, the “Employment
Agreement”);
WHEREAS, the Employee also serves on
the Company’s Board of Directors (“Board”);
WHEREAS, the Company and the Employee
now desire to terminate the Employment Agreement by mutual agreement and
Employee further wishes to tender his resignation from his position as CEO of
the Company and from the Board, effective as of 5:00 p.m. Pacific time, on
February 1, 2010 (the “Termination Date”);
WHEREAS, the Company is currently
indebted to the Employee for various financial obligations, including, but not
limited to, those certain deferred unpaid salary amounts and director’s fees,
accrued unpaid expenses, principal and accrued interest due on that certain loan
made by Employee to the Company and one year of Employee’s base salary in such
amount as would be due pursuant to the terms of the Employment
Agreement;
WHEREAS, due to the Company’s lack of
immediate access to the capital and credit markets as a result of the current
global economic difficulties, the Company is currently negotiating mutually
agreeable settlements and discounts with all of its creditors;
WHEREAS, pursuant to the terms of that
certain non-binding Term Sheet entered into by the Company and Employee on
January 12, 2010 (“Term Sheet”), the Company and Employee have agreed to certain
mutually beneficial separation and severance terms as a compromise and
settlement in full of all amounts, obligations and indebtedness owed by the
Company to the Employee as well as a mutual release of any and all claims either
party may have against the other.
NOW THEREFORE, in consideration of the
above and the mutual promises, covenants and conditions contained herein, and
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
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AGREEMENT
1.
Employment. The
Company and the Employee hereby agree to mutually terminate the Employment
Agreement and sever their employment relationship effective on the Termination
Date pursuant to the terms and conditions set forth in this Separation
Agreement.
2.
Resignation. The
Employee shall cease functioning in the position of CEO for the Company, as well
as a member of the Board, and in any other position that he may hold or be
construed to hold with the Company or its affiliates, and shall cease to be an
employee for the Company and its affiliates, effective on the Termination
Date. As of the Termination Date, the Employee hereby tenders
resignation, without cause, as the Company’s CEO, a member of the Board and as
any other position that the Employee may hold, or may be construed to hold with
the Company or its affiliates.
3.
Severance. All
payments of every description in this Section 3 shall be subject to the
customary withholding tax and other employment taxes as required with respect to
compensation paid to the Employee. Employee acknowledges and agrees
that the payments and agreements set forth in this Section 3 shall constitute
payment in full of all monies owed to Employee, and the Company is not obligated
to provide any further severance in accordance with paragraph 4.5 or any other
section of the Employment Agreement.
3.1.
Cash. The Company
shall make cash payments to Employee in immediately available funds as
follows:
a. Initial
Payment. The Company shall make an initial payment to Employee
of Twelve Thousand Five Hundred Dollars ($12,500) upon the signing of the Term
Sheet, receipt of which is hereby acknowledged.
b. Signing
Payment. Immediately upon the signing of this Separation
Agreement by both parties, the Company shall make a further payment to Employee
of Twelve Thousand Five Hundred Dollars ($12,500).
c. Subsequent
Payment. Upon the earlier of the Company’s closing of either
(i) a transaction involving the Company’s Mineral Ridge mining property, or (ii)
a financing by a third party involving an infusion of working capital to the
Company of at least $250,000, the Company shall make a payment to Employee of
Twenty Thousand Three Hundred Seventy-Eight Dollars and 57/100 ($20,378.57) (the
“Subsequent Payment”).
3.2.
Promissory
Note. The Company shall, as soon as reasonably practicable,
issue Employee an unsecured promissory note (the “Note”), in the principal
amount of Three Hundred Sixty-Six Thousand Six Hundred Twenty-Three Dollars and
32/100 ($366,623.32), such Note to accrue interest at a rate of 2.0% per annum,
with a maturity date twenty-four (24) months from the date of this Separation
Agreement. Employee hereby agrees that the Note shall be forgiven in
its entirety and cancelled in the event the Company agrees, prior to the Note’s
maturity, to proceed with the purchase of an asset (project) owned by the
Employee and submitted through NewCo (as defined and further described below)
and the parties enter into a definitive agreement with respect to such
project.
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3.3. New Company Interest. Employee
shall, as soon as reasonably practicable, form a new company, contemplated by
the parties to be a Nevada limited liability company (“NewCo”), which shall be
formed for the purposes of engaging in mineral exploration and development, and
Employee shall act as Chief Executive Officer and Exploration Geologist of
NewCo.
a. Issuance of NewCo
Interest. Immediately upon the formation of NewCo, NewCo shall
issue the Company that number of shares or membership interests, as applicable,
of NewCo representing a twenty-five percent (25%) ownership interest in NewCo
(the “NewCo Interest”) in exchange for ongoing monthly cash payments of Seven
Thousand Five Hundred Dollars ($7,500) (“NewCo Payments”), such NewCo Payments
to commence 30 days after the formation of NewCo and continue on a monthly basis
thereafter for a period of twenty-four (24) months, all as to be further
detailed in a contribution agreement contemplated to be entered into by and
between the Company and NewCo (“Contribution Agreement”). The NewCo
Payments shall be under the sole control and discretion of Employee in his
capacity as CEO of NewCo, to use for the benefit of NewCo. The
Company shall have no further financial or other obligations to NewCo except as
expressly agreed to in writing.
b. NewCo Mineral
Projects. Employee hereby agrees to use his best commercially
reasonable efforts in his capacity as CEO of NewCo to identify, locate and
review commercially viable exploration and mining projects in order to acquire,
sell or joint venture such properties with third parties, with the Company to
have a right of first refusal as described below. For the sake of
clarity, the parties hereby acknowledge that as of the date of this Separation
Agreement, neither party has identified any such property intended to be the
basis of such future transaction. The Company shall have a right of
first refusal to negotiate with NewCo for the purchase of any such mining,
mineral or exploration property rights acquired by NewCo (the “Right of First
Refusal”) as follows, all of which shall be subject to definitive agreements
between the Company and NewCo to be executed upon NewCo’s
formation:
(i) Notice. NewCo shall
provide Company with written notice (“Notice”) stating (A) NewCo’s bona fide
intention to recommend, broker, joint venture, sell or otherwise transfer the
subject property or portions thereof (“Offered Property”); (B) the name and
address of each proposed purchaser or other transferee (the “Proposed
Transferee”), (C) the bona fide cash price or other consideration for which
NewCo proposes to transfer the Offered Property (the “Offered Price”), and (D)
that NewCo acknowledges the Notice is an offer to transfer the Offered Property,
or any rights therein, to the Company pursuant to the Company’s Right of First
Refusal at the Offered Price as provided for in this Agreement;
(ii) Exercise of Right of First
Refusal. At any time within thirty (30) days after the date of
the Notice, the Company may, by giving written notice to NewCo, elect to
participate in the purchase or transfer of all or some portion of the Offered
Property proposed to be transferred to any one or more of the Proposed
Transferees named in the Notice, on terms at or more favorable than the terms
set forth in the Notice.
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(iii) Purchaser’s Right to
Transfer. If the Company purchases less than all of the
Offered Property as provided in this Section, then NewCo may sell or otherwise
transfer such remaining portion of the Offered Property to each Proposed
Transferee at the Offered Price or at a higher price, provided that (A) such
sale or other transfer is consummated within one hundred twenty (120) days after
the date of the Notice.
3.4. Conversion of Amounts Owed into
Company Common Stock. Amounts owed to Employee pursuant to
this Section 3 may be converted into shares of Company common stock under
certain circumstances as set forth below and upon the following terms and
conditions:
a. Conversion of
Note. The Note to be issued to Employee pursuant to Section
3.2 shall, by its terms and to the extent of an outstanding balance of principal
and interest, be convertible into shares of Company common stock as follows: (i)
on the one (1) year anniversary of the date of the Note, the Employee may elect
to convert up to fifty percent (50%) of the then outstanding balance of
principal and interest into such number of shares of Company common stock at a
conversion rate of 16.7 shares of Company common stock for each $1.00 of
principal and interest to be converted; and (ii) on the Note’s stated maturity
date, the Employee may elect to convert any remaining outstanding balance of
principal and interest into such number of shares of Company common stock at a
conversion rate of 10 shares of Company common stock for each $1.00 of principal
and interest to be converted.
b. Conversion of NewCo
Payments. In the event the Company is unable or fails to make
the NewCo Payments when and as due pursuant to Section 3.3(a) for three (3)
consecutive months, such accrued sums due and owing may, at the option of NewCo,
be convertible into such number of shares of Company common stock at a
conversion rate to be determined by dividing the total amount due and elected by
NewCo to be converted by the 20-day trailing average closing price of the
Company’s common stock as quoted by the OTC Bulletin Board based on the date of
the conversion election. In the event of issuance shares carrying a
Rule 144 Legend a 30% discount to the 20-day trailing average will be applied
when calculating the number of shares to be issued.
c. Conversion upon
Termination. Notwithstanding anything herein to the contrary,
in the event the parties mutually agree to terminate this Separation Agreement
prior to the payment of all amounts owed under this Section 3, any such sums,
including, but not limited to, the Subsequent Payment, the Note and the NewCo
Payments, shall automatically be converted into such number of shares of Company
common stock at a conversion rate to be determined by dividing the total amount
due and unpaid pursuant to Section 3 herein by the 20-day trailing average
closing price of the Company’s common stock as quoted by the OTC Bulletin Board
based on the date of termination.
3.5. Stock Option
Grants. Any unvested portion of the Employee’s stock options
outstanding as of the Termination Date shall vest immediately upon the
Termination Date, and shall otherwise be subject to the provisions and terms
thereof.
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3.6. Purchase of Company
Stock. The Company further acknowledges that additional
amounts in Expenses ($4,807.74), Director’s fees ($5,000.00) and truck rental to
Mineral Ridge ($4,320.00) through the date of resignation will be held in
reserve to offset the $11,835.00 for the purchase of the 1.5MM shares of stock
that it was to have issued on May 7, 2009 under an engagement contract dated the
same day. Any amounts owing (or in credit) to complete the $11,835.00
purchase will be paid within thirty (30) days of the Effective Date and the
stock certificate shall be issued at that time.
4.
Release of
Liability. The Employee acknowledges that he enters into this
Separation Agreement freely and voluntarily, and agrees as follows:
4.1. Title VII
Claims. The Employee acknowledges that Title VII of the Civil
Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Americans With
Disabilities Act, as amended, the Age Discrimination in Employment Act of 1967,
the Vietnam Era Veterans Readjustments Assistance Act of 1974, the Federal
Family and Medical Leave Act of 1993, as amended, and other state and local laws
provide the right to an employee to bring charges, claims or complaints against
an employer if the employee believes he has been discriminated against on a
number of bases, including but not limited to race, ancestry, color, religion,
sex, marital status, national origin, age, status as a veteran of the Vietnam
era, request or need for family or medical leave, physical or mental disability,
medical condition or sexual preference. The Employee, with full
understanding of the rights afforded him under these and other federal, state
and local laws, agrees that he will not file, or cause to be filed against the
Company, any charges, complaints, or actions based on any alleged violation of
these federal, state and local laws, or any successor or replacement federal or
state laws. The Employee hereby waives any right to assert a claim
for relief available under these federal, state and local laws including, but
not limited to, back pay, attorneys' fees, damages, reinstatement, or injunctive
relief, which the Employee may otherwise recover based on any alleged violation
of these federal, state and local laws, or any successor or replacement federal,
state or local laws.
4.2. Release of
Claims. In exchange for the promises and covenants set forth
herein, the Employee hereby releases, acquits, and forever discharges the
Company, its parents and subsidiaries, and their officers, directors, agents,
servants, employees, attorneys, shareholders, partners, successors, assigns,
affiliates, customers, and clients of and from any and all claims liabilities,
demands, causes of action, costs, expenses, attorneys' fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed (“Claims”), (including but not limited to any federal, state or
local law or cause of action including, but not limited to, the National Labor
Relations Act, Title VII of the Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1991, the Americans With Disability Act, as amended, the Federal
Family and Medical Leave Act of 1993, as amended, the Vietnam Era Veterans
Readjustment Assistance Act of 1974, and state and local laws, any allegation of
wrongful termination and any claim arising out of the Constitution of the State
of Nevada; contract law; wrongful discharge; discrimination; harassment; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing), but only to the extent that such Claims directly or
indirectly arise out of or are in any way connected with: (a) the Company’s
employment of the Employee, (b) the termination of that employment, (c) the
Employee’s tenure as a member of the Board; (d) the Company’s performance of its
obligations as the Employee’s former employer; (e) claims or demands related to
salary, bonuses, commissions, (f) vacation pay, fringe benefits, expense
reimbursements, severance pay, or any form of compensation, or (g) repayment of
loans made by Employee to the Company. The Employee agrees to indemnify and hold
the Company and its shareholders, directors, officers, agents and employees
harmless from any liabilities, debts, demands, causes of action, injuries,
costs, attorneys' fees or damages of any kind arising out of the Employee’s
action or inactions, whether negligent or otherwise, with respect to, or in
connection with this Separation Agreement or the Employment
Agreement.
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4.3. ADEA
Waiver. Employee acknowledges that he is knowingly and
voluntarily waiving and releasing any rights Employee may have under the Age
Discrimination in Employment Act of 1967, as amended (“ADEA”). Employee also
acknowledges that the consideration set forth in Section 3 given for the waiver
and release pursuant to this Agreement is in addition to anything of value to
which Employee was already entitled. Employee further acknowledges
that he has been advised by this Agreement in writing, as required by the ADEA,
that:
a. his
waiver and release does not apply to any rights or claims that may arise after
the execution date of this Agreement;
b. he
has the right to consult with an attorney prior to executing this
Agreement;
c. he
has twenty-one (21) days to consider this Agreement (although Employee may
choose to waive this provision by voluntarily executing this Agreement
earlier);
d. he
has seven (7) days following the execution of this Agreement to revoke the
Agreement; and
e. this
Agreement will not be effective until the date upon which the revocation period
has expired, which will be the eighth (8th) day after this Agreement is executed
by both parties.
5.
Confidential
Information. The Employee acknowledges that during the course
of his duties with the Company, he handled confidential information of the
Company and its affiliates. The Employee agrees he will retain in the
strictest confidence all confidential matters which relate to the Company or its
affiliates, including, without limitation, pricing lists, business plans,
financial projections and reports, business strategies, internal operating
procedures and other confidential business information from which the Company
derives an economic or competitive advantage or from which the Company might
derive such advantage in its business, whether or not labeled "secret" or
"confidential," and not to disclose directly or indirectly or use by him in any
way, either during the term of this Separation Agreement or at any time
thereafter except as permitted by law.
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6.
Trade Secrets. The
Employee shall not disclose to any others or take or use for the Employee's own
purposes or purposes of any others at any time, any of the Company's trade
secrets, including without limitation, confidential information; customer lists;
information concerning current or any future and proposed work, services,
properties or products; the fact that any such work, services, properties or
products are planned, under consideration, or in production, as well as any
description thereof, computer programs or computer software. The
Employee agrees that these restrictions shall also apply to (i) trade secrets
belonging to third parties in the Company's possession and (ii) trade secrets
conceived, originated, discovered or developed by the Employee during the term
of his employment.
7.
Inventions;
Ownership Rights. The Employee agrees that all ideas,
techniques, inventions, systems, formulas, discoveries, technical information,
programs, prototypes and similar developments ("Developments") developed,
created, discovered, made, written or obtained by him in the course of or as a
result, directly or indirectly, of performance of his duties to the Company, and
all related industrial property, copyrights, patent rights, trade secrets and
other forms of protection thereof, shall be and remain the property of the
Company. The Employee agrees to execute or cause to be executed such
assignments and applications, registrations and other documents and to take such
other action as may be requested by the Company to enable the Company to protect
its rights to any such Developments.
8.
No Disparagement of the Company or
Employee. The Employee agrees that he
will not make any statements which are or may appear derogatory about or
disparaging to the Company or any of its agents, officers, directors or other
employees, except as may be required by court order or applicable
law. The Company also agrees it
will not make any statements which are or may appear derogatory about or
disparaging to the Employee, except as may be required by court order or
applicable law.
9.
Non-Interference; No
Solicitation. The Employee agrees not to interfere with any of
the Company's contractual obligations with others. Furthermore, the
Employee agrees during a period of eighteen (18) months commencing on the
Termination Date, to not, without the Company's express written consent, on his
behalf or on behalf of another: (i) contact or solicit the business of any
client, customer, creditor or licensee of the Company, (ii) hire employees of
the Company, other than clerical employees, or (iii) solicit the business of any
client, customer or licensee of the Company. The Employee
acknowledges that this section 9 is a reasonable and necessary measure designed
to protect the proprietary information of the Company.
10. Return Company
Property. The Employee agrees that he will promptly, within
two (2) business days of the Termination Date, return to the Company, all the
Company's or its affiliates' memoranda, notes, records, reports, manuals,
drawings, designs, computer files in any media and other documents (including
extracts and copies thereof) relating to the Company or its affiliates, and all
other property of the Company.
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11. Actions Contrary to
Law. Nothing contained in this Separation Agreement shall be
construed to require the commission of any act contrary to law, and whenever
there is any conflict between any provision of this Separation Agreement and any
statute, law, ordinance, or regulation, contrary to which the parties have no
legal right to contract, then the latter shall prevail; but in such event, the
provisions of this Separation Agreement so affected shall be curtailed and
limited only to the extent necessary to bring it within legal
requirements.
12. Miscellaneous.
12.1. Notices. All
notices to be given by either party to the other shall be in writing and may be
transmitted by personal delivery, facsimile transmission, overnight courier or
mail, registered or certified, postage prepaid with return receipt requested;
provided, however, that notices
of change of address or facsimile number shall be effective only upon actual
receipt by the other party. Notices shall be delivered at the
following addresses, unless changed as provided for herein:
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To
the Employee:
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David
A. Caldwell
165
West Oak Street
Elko,
NV 89801
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To
the Company:
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Board
of Directors
Golden
Phoenix Minerals, Inc.
1675
East Prater Way, Suite 102
Sparks,
Nevada 89434
Fax: 775-853-5010
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12.2. Entire
Agreement. This Separation Agreement supersedes any and all
agreements, either oral or written, between the parties hereto with respect to
its subject matter, including, but not limited to, the Employment Agreement and
the Term Sheet. Each party to this Separation Agreement acknowledges
that no representations, inducements, promises, or agreements, orally or
otherwise, have been made by any party or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement, statement, or
promise not contained in this Separation Agreement shall be valid or
binding. Any modification of this Separation Agreement will be
effective only if it is in writing and signed by both parties.
12.3. Governing Law. This
Separation Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada.
12.4. Jurisdiction and
Venue. The parties hereby consent to the exclusive
jurisdiction of the state and federal courts sitting in Nevada with the sole and
exclusive venue of Washoe County in any action on a claim arising out of, under
or in connection with this Separation Agreement or the transactions contemplated
by this Separation Agreement, provided such claim is not required to be
arbitrated pursuant to Section 12.5. The parties further agree that
personal jurisdiction over them may be effected by notice as provided in Section
12.1, and that when so made shall be as if served upon them personally within
the State of Nevada.
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12.5 Arbitration. Any
controversy, dispute or claim arising out of or relating to this Separation
Agreement or the Employment Agreement terminated by this Separation Agreement,
performance hereunder or breach thereof, which cannot be amicably settled, shall
be settled by arbitration conducted in Washoe County unless some other location
is mutually agreed to in a writing signed by both parties. Said
arbitration shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association at a time and place within the
above-referenced location as selected by the arbitrator(s).
a. Initiation of
Arbitration. After seven (7) calendar days prior written
notice to the other, either party hereto may formally initiate arbitration under
this Separation Agreement by filing a written request therefore, and paying the
appropriate filing fees, if any.
b. Hearing and Determination
Dates. The hearing before the arbitrator shall occur within
thirty (30) calendar days from the date the matter is submitted to
arbitration. Further, a determination by the arbitrator shall be made
within forty-five (45) calendar days from the date the matter is submitted to
arbitration. Thereafter, the arbitrator shall have fifteen (15)
calendar days to provide the parties with his decision in
writing. However, any failure to meet the deadlines in this paragraph
will not affect the validity of any decision or award. The
arbitrator’s written decision shall summarize the issues and resolution of the
controversy, and the decision shall be based solely upon the law governing the
claims and defenses pleaded by the parties. The arbitrator shall have
the authority to award any relief available in a court of law.
c. Binding Nature of
Decision. The written reasoned decision of the arbitrator
shall be binding on the parties without the right to any writ of review, appeal,
or court review thereof. Judgment thereon shall be entered in a court
of competent jurisdiction.
d. Injunctive
Actions. Nothing herein contained shall bar the right of
either party to seek to obtain injunctive relief or other provisional remedies
against threatened or actual conduct that will cause loss or damages under the
usual equity rules including the applicable rules for obtaining preliminary
injunctions and other provisional remedies.
e. Fees and Costs. The
cost of arbitration, including the fees of the arbitrator, shall initially be
borne by the Company; provided, the prevailing party (as determined by the
arbitrator) shall be entitled to recover all such costs allowed by law, in
addition to attorneys’ fees and other costs, in accordance with Section 12.6 of
this Separation Agreement.
12.6. Attorneys' Fees. In the event of any
litigation, arbitration, or other proceeding arising out of this Separation
Agreement, or the parties’ performance as outlined herein, the prevailing party
shall be entitled to an award of costs, including an award of reasonable
attorneys’ fees. Any judgment, order, or award entered in any such
proceeding shall designate a specific sum as such an award of attorneys’ fees
and costs incurred. This attorneys’ fee provision is intended to be
severable from the other provisions of this Separation Agreement, shall survive
any judgment or order entered in any proceeding and shall not be deemed merged
into any such judgment or order, so that such further fees and costs as may be
incurred in the enforcement of an award or judgment or in defending it on appeal
shall likewise be recoverable by further order of a court or panel or in a
separate action as may be appropriate.
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12.7. Amendment,
Waiver. No amendment or variation of the terms of this
Separation Agreement shall be valid unless made in writing and signed by the
Employee and the Company. A waiver of any term or condition of this
Separation Agreement shall not be construed as a general waiver by the
Company. Failure of either the Employee or the Company to enforce any
provision or provisions of this Separation Agreement shall not waive any
enforcement of any continuing breach of the same provision or provisions or any
breach of any provision or provisions of this Separation Agreement.
12.8. Ambiguities. This
Separation Agreement shall not be subject to the rule that any ambiguities in
the contract are to be interpreted against the drafter of the Separation
Agreement.
12.9. Counterparts. This Separation
Agreement may be signed in one or more counterparts (by facsimile or otherwise),
all of which shall be treated as one and the same instrument.
IN
WITNESS WHEREOF, the undersigned have executed this Separation Agreement
effective as of the date first hereinabove written.
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THE
EMPLOYEE
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Date:
1/19/10
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By: /s/ David A.
Caldwell
David A.
Caldwell
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THE
COMPANY
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Date:
1/25/10
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Golden
Phoenix Minerals, Inc.
By: /s/ Robert P.
Martin
Robert P. Martin,
President
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